Tactical ETF 1Q21 Market Review & Outlook

April 13, 2021 — Heading into the second quarter, the macro picture continues to be supportive for risk assets; additional stimulus, increased vaccine distribution, and healthy consumer balance sheets have pushed growth forecasts higher. From an economic perspective, the global economy is primed to grow at its fastest pace in decades. Global GDP growth is now expected to be around 6.5% for 2021. The primary risk to the outlook is an overheating scenario, which could drive up inflation quickly and prompt fears that the Fed will need to rush a more compressed taper/hiking timeline. Indeed, these fears have already crept into bond markets as is evidenced by the rise in rates during the first quarter; over the next quarter, however, we do not see these fears derailing the recovery or the risk rally.